Henry Billings Brown

“ But where a person, being lawfully indebted to several creditors, makes a mortgage or other conveyance to one for the open and avowed purpose of preferring him, then, in the absence of a law of the forum prohibiting preferences, such mortgage or conveyance is valid, though it may operate to bar other creditors from obtaining satisfaction of their debts. A mortgage which may have the effect of hindering other creditors is not necessarily unlawful, though a mortgage given to defraud them is always so. ”

“ In all such cases the question of good faith is one of fact, and a mere error of judgment will not be imputed as a fraud. The fact that the debt so included was a bona fide debt, and that the act of the mortgagee in so including it was subsequently affirmed by the creditors interested, will be strong evidence that no actual fraud was intended. ”

“ Of both these notes it may be said that, whether they were actually owned by the bank or not, there is nothing to indicate that they were not just debts of John H. Schwartz. It would also seem that McConn's inclusion of these notes in the mort gage to the bank was made in good faith supposing that he had the right to cover them by the same security he was taking in favor of the bank. ”

“ The fact that the assignee or the preferred creditor of an insolvent debtor is a relative or intimate friend is doubtless calculated to excite suspicion; yet in reality there is nothing unnatural in a dealer or trader who is in need of credit, or a loan of money to carry on his business, first applying to his relatives for such loans, and, if the evidence be undisputed that the money was advanced, the fact that the persons making the loan are relatives ought not to debar them from receiving security. Their rights are neither increased nor diminished by the fact of relationship. ”

“ In such cases the fact that he receives a good consideration will not validate the transaction, unless, at least, the creditor has obtained the benefit of the consideration. A like principle applies where a mortgage is given and withheld from record in order to give the mortgagor a fictitious credit. ”

“ A general assignment to a relative as trustee for the benefit of creditors is open to more suspicion, since such are more often selected as instruments for creating a secret trust in favor of the assignor. ”

“ Madison, and was then entered as of December 29th. AS THE NOTE REALLY BELONGED TO JOHN H. HEllMan, and was transferred to him before he left Galena, though the entry had not yet been made, there can be no just criticism upon his including it in his mortgage. Even if the purchase had not been made, there is nothing improbable in John V. Hellman desiring that his wife's note should be secured, and if he suspected, as he doubtless did, that Schwartz was likely to fail, he would naturally put the note in his father's hands to be secured with the much larger amount due this father ”

“ Wood v. Scott, 55 Iowa, 114, 7 N. W. 465; Lombard v. Dows, 66 Iowa, 243, 23 N. W. 649; Taylor v. Wendling, 66 Iowa, 562, 24 N. W. 40; McNichols v. Rubelman, 13 Mo.App. 515; Holt v. Creamer, 34 N. J. Eq. 181; Heintze v. ”